Short Newmont Mining (NEM)?

Discussion in 'Trading' started by billb2112, Aug 9, 2003.

  1. I can't understand why this stock has nearly doubled in the past 6 months. This sucker hit not only a 52 week high yesterday, but it looks like it hasn't seen these levels since 1996 where it reached an all time high of 60 dollars.

    Being that it's a mining stock, I can't imagine they've figured out how to make gold from straw so I don't see real growth ahead of them.

    Can anyone dissuade me from shorting this sucker Monday morning? I'm not trying to pick a top, this is going to be a swing or position trade. I hope to ride it down to 33 or 30.
     

  2. I could try. I was long this for couple months, got out at the absolute low of June 10! Argh! (Faulty crystal ball.)

    How much room do you plan on giving it?
     
  3. to the POG ( price of gold )

    cash or futures ( does not matter )

    if the gold price starts moving up this week

    it will confirm the NEM and other mining stocks

    advances.

    if you see the POG stalling or falling rapidly from this level

    that should increase your chances of success

    unless there is a short squeeze or options related play

    going on

    good luck
     
  4. what the experts say. The mkt can stay irrational longer than you can stay solvent.
     
  5. I tried to make a relationship between the price of gold and this advance on NEM and could not draw a conclusion. While the price of gold has mostly meandered or been up a bit, NEM has been on a tear. I think short term the price of gold may be a factor, but I feel there is some correcting to be done on the part of NEM so that it does fall more in line w/ the price of gold.

    If gold spikes Monday morning, I may wait another day or get in towards the end of the day at a better price.

    As far as room, I'm going for 6 to 8 points to the good, so I'll give myself about the same amount of room to the bad.
     
  6. And FDR said we have nothing to fear but fear itself :)

    While it may sound like I'm basing this purely on fundamentals, I'm more of a TA guy. NEM came up on a technical scan I did. Typically, I trade this scan purely on the laws of probability, but with NEM I dug a little deeper to see why a mining company has hit such an extreme.

    This thing may hit 60 for all I know ...


     
  7. If its short term ,(less than 3 mos.),and you adhere to targets of 30 to 33 ,it could be a green trade.Keep in mind the fed and the deficit.Remember,450bil. this year, 490bil. next year. I think its a real good bet that gold will be at, or higher than its current level(355),by year end 2004. I've been in and out of the metals markets,numerous times over the past 20 years.Metal stocks have been lagging the performance of the metals for the past year,until this last few weeks. I dont follow NEM ,but if there not profitable,its because they 've been accumulating top quality properties for the past two years.At 300 an once, golds a a tough buis. to be in. At 350 , even most junior producers are profitable and have posititve earnings.The sector is still trending up. and the fundamentals are continually improving.In your favor,the metals sector is generally a very volatile sector.It can be cruel and brutal,but it can also be like sex with a playboy centerfold.I'd think you have slightly better than even chance of a green trade on volatility alone. If you cant stomach volatility ,avoid the trade.
     
  8. If you want some info on the other side of your trade, read some of the work of Bill Flekenstien, who writes a column for realmoney.com. He's been very bullish on NEM for some time now and just recently said he has now accumulated his full position in the stock. I haven't really paid too much attention to what he's said about NEM, but I know he mentions the stock a lot and that he's bullish on gold long term.

    Besides price of gold, you have to look at what kind of hedging program a producer has, what kind of reserves they have in the ground, cost of production, etc. Relative valuations between gold co's can vary widely.
     
  9. bill dont short something you dont understand shorting on 52 week high without technical basis is suicide and you used the word hope (such a common word among bulls these days actually) in your post
     
    #10     Aug 10, 2003